H1-2018 RESULTS PRESENTATION TO FINANCIAL ANALYSTS JULY 25 TH , 2018 - PowerPoint PPT Presentation

H1-2018 RESULTS PRESENTATION TO FINANCIAL ANALYSTS JULY 25 TH , 2018

H1-2018 Results: Net income at € 62.8m; RoATE stands at 7.8% 1 2 3 4 5 H1-2018 H1-2018 CAPITAL KEY TAKE AWAYS APPENDICES HIGHLIGHTS RESULTS MANAGEMENT & OUTLOOK 2 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

PART 1 H1-2018 HIGHLIGHTS

Robust first semester in normalising risk environment Strong solvency ratio at 163% 1 Turnover reached € 685m y-t-d, up 2.1% at constant FX and perimeter; Q2-2018 up 2.1% y-o-y − Trade Credit Insurance growing again in mature markets and emerging markets recovering progressively − Client retention at record level and insured turnover continuing to grow H1-2018 net loss ratio down by (15.1) ppts. at 43.2%; Net combined ratio at 77.0% − Loss experience progressively normalising, both on frequency and average size of claims − Favourable past claims management and recoveries continue − Net cost ratio at 33.8% vs. 34.0%* in H1-2017; driven by strict cost control and higher reinsurance commissions − Business investments fully funded by cost savings Net income (group share) at € 62.8 m, of which € 27.3m in Q2-2018; annualised RoATE at 7.8% Estimated Solvency ratio at 163% 1 , above the target range (140% - 160%) − Partial internal model progressing while monitoring standard formula regulation evolution − Share buyback program under way with € 16.5m purchased at end of June (1.7m shares) Fit to Win achievements: − Achieved € 18m y-t-d ( € 13m additional cost savings vs. H1-2017), € 30m 2018 annualised target likely to be slightly exceeded − Continuing disciplined investment of € 15m ( € 11m additional) into growth, risk management, compliance and process transformation * Adjusted for € 6m Italy one-off. Reported number for H1-2017 was 35.5% 1 The estimated Solvency ratio disclosed in this presentation is a preliminary calculation based on Coface’s interpretation of Solvency II. The final calculation could result in a different Solvency ratio. The estimated Solvency ratio is not audited. 4 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

Fit to Win: continuing to drive an in-depth transformation Business Technology, Transformation and Innovation ► Technology at the heart of our cultural transformation: CEO − Reorganised IT and Operations departments into realigned Business Technology (BT) unit Strategic planning & PMO Internal Audit Economic research Strategy Marketing & Innovation & Business Dev.* ► Created Transformation Office to accelerate Partnerships Financial Institutions business transformation; running more than 20 lean projects Architecture Finance & Risk* Transformation Lean & Process Office* Project & Change mgmt.. ► Created an Innovation department to accelerate digital agility : hackathons, process innovation… Corporate Secretary* Underwriting* ► Upgrading leadership to drive our strategic agenda Business Domains − Training for 300 managers Business IT services Commercial Technology* operations* Infrastructure & Operations ► Maintaining tight focus on risks in a International normalising risk environment − Overall economy grows at steady pace CEO CEO CEO CEO CEO CEO CEO W.Europe* C. Europe* N. Europe* MedAf* N. America* APac* LatAm* − Closely monitoring new risks (protectionism, populism, trade wars…) : new recruitments : new / renovated dpts. : Group Management Board *Member of the Group Executive Committee 5 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

PART 2 H1-2018 RESULTS

Turnover growth at 2.1% driven by credit insurance premiums Total revenue up 2.1% vs. H1-2017 at constant FX (1.0)% 2.1% In € m 692 685 ► Trade credit insurance* growing at 2.6% at constant FX ► Growth driven by client activity (better volume effect) Gross Earned Premiums (GEP) 566 and record high retention rate 561 ► Economic environment continues to drive pricing pressure Insurance related fees 71 70 Other revenue 56 54 ► Other revenue (Factoring and Services) down by (2.1)% H1-2017 H1-2018 vs. H1-2017 12.5% 12.5% Fees / GEP ratio ► Fees / GEP stable H1-2017 H1-2018 * Including Bonding and Single Risk V% V% ex. FX 7 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

Revenue increase driven by mature markets Western Europe Northern Europe Central Europe Mediterranean & Africa 0.5% 1.5% (1.8)% (1.8)% 6.9% 7.8% 5.8% 7.3% 155 152 185 143 175 142 67 63 H1-17 H1-18 H1-17 H1-18 H1-17 H1-18 H1-17 H1-18 Stable insurance revenues; Record retention and Insurance revenues growing with Good commercial momentum growing client activity record retention and higher activity and higher retention Lower factoring North America Asia Pacific Latin America (10.4)% (1.5)% (8.1)% 1.7% (20.3)% (6.5)% 63 58 51 46 42 34 H1-17 H1-18 H1-17 H1-18 H1-17 H1-18 Stabilised portfolio; Growing new business and client activity Remaining prudent on risk although improving Q1 performance offset by premium refunds and Higher revenues driven by large deals lower Single Risks V% V% ex. FX Total revenue by region, in € m 8 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

Supportive client activity and record retention New production 1 83 82 Performance improving from Q1-2018 but 74 62 remaining prudent in highly competitive environment H1-15 H1-16 H1-17 H1-18 Retention rate 1 93.0% 90.2% 89.2% 88.2% Record/high retention across all regions H1-15 H1-16 H1-17 H1-18 Price effect 1 Controlled price decrease reflecting (1.6)% (1.7)% good loss experience (2.1)% (2.9)% H1-15 H1-16 H1-17 H1-18 Volume effect 1 Client activity remains high in all markets 3.4% 2.5% 1.1% 0.0% confirming previous quarters trends H1-15 H1-16 H1-17 H1-18 1 Portfolio as of June 30 th 2018; and at constant FX and perimeter. New production: in € m 9 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

Gross loss ratio normalising after a record low Q1 Loss ratio before reinsurance and including claims handling expenses, in % 57.8 56.0 54.2 50.3 ► Claims activity progressively normalising, 42.4 45.0 43.0 39.7 both in terms of number and average size ► Gross loss ratio includes 1.5% gain from recoveries on highly reinsured FAC business H1-2017 H1-2018 Q1-17 Q2-17 Q3-17 Q4-17* Q1-18* Q2-18* * Impact of facultative business (highly reinsured): +9.7 ppts. +0.7 ppts. -1.5 ppts. Loss ratio before reinsurance and excluding claims handling expenses, in % (9.0) (18.2) (25.1) (21.4) (27.2) (32.1) ► No change in reserving policy 74.1 72.5 71.9 71.8 70.2 70.0 61.0 ► Prior years boni well above 53.7 48.8 49.0 45.3 39.7 historical average All underwriting years Prior underwriting years 10 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

Loss ratio stable in mature markets and progressively normalising in emerging markets Loss ratio before reinsurance, including claims handling expenses – in % 8%* 7%* 5%* Group North America Asia Pacific Latin America 146.8 113.4 100.6 85.0 63.3 60.2 56.3 51.4 56.3 51.0 53.8 42.4 49.0 35.9 12.2 2.1 FY-15 FY-16 FY-17 H1-18 FY-15 FY-16 FY-17 H1-18 FY-15 FY-16 FY-17 H1-18 FY-15 FY-16 FY-17 H1-18 21%* 27%* 8%* 22%* Central Europe Western Europe Northern Europe Mediterranean & Africa 57.4 58.5 49.6 52.3 57.2 53.9 54.0 54.2 49.8 50.3 48.4 39.8 38.5 32.6 33.2 34.7 FY-15 FY-16 FY-17 H1-18 FY-15 FY-16 FY-17 H1-18 FY-15 FY-16 FY-17 H1-18 FY-15 FY-16 FY-17 H1-18 * % of Total revenue by region 11 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

Continued tight cost controls (0.5)% * 2.7% * * € 6.0m Italy one-off (3.9)% (0.9)% In € m Cost ratio before reinsurance, in % 176 172 171 169 168 167 External acquisition 38.0 37 37.4 35.7 35.7 40 34.7 41 34.8 38 costs (commissions) 39 40 * * 35.6 * 139 131 131 131 128 127 Internal costs Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 * ex. € 6.0m Italy one-off Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 V% V% ex. FX * € 6.0m Italy one-off ► Achieved € 18m y-t-d ( € 13m additional cost savings vs. H1-2017), € 30m annualised 2018 target 270 262 (8) (6) 8 (13) now likely to be slightly exceeded 11 ► Invested € 15m ( € 11m additional) into growth, risk management, compliance and process transformation ► Cost base impacted by 2.9% inflation H1-2017 FX Costs Investments Inflation One off H1-2018 ► Q2-2018 gross cost ratio at 35.7% savings costs 12 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018

Reinsurance result impacted by record low loss ratios and growing accounting cession rate H1-17 H1-18 Gross earned premiums 565.6 560.7 Net earned premiums 415.5 398.7 ► Higher premium cession rate (underwriting years 28.9% 26.5% Premium cession rate 2017 and 2018) materialising in accounting numbers (+2.4 ppts. in Q1-18) Gross claims expenses 316.8 237.5 Net claims expenses 242.1 172.3 27.5% 23.6% Claims cession rate H1-17 H1-18 V% Underwriting income before reinsurance 38.8 122.2 +215% Reinsurance result N.S. (17.2) (33.9) Underwriting income after reinsurance 21.5 88.3 +310% 13 H1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 25 JULY 2018